For many years, the setting of interest rate, such as LIBOR and SIBOR, were left to the banks, working under the association.
Recently, there were scandals that there were dishonesty in fixing the rates in London, and that some banks were posting fictitious rates and benefiting from their acts by trading on these false rates. Apparently, there were similar abuses in other countries.
The Association of Banks in Singapore has recommended that the Monetary Authority of Singapore should be involved in the fixing of the rates.
I support this move, as there a neutral and responsible body should take the responsibility in overseeing this activity. While it may be challenging, the responsibility cannot be delegating to interested parties, such as the banks.
I hope that the recent scandals in several fields around the world underlines the need for regulators to play a more active role, instead of leaving matters to the market or to the participants with vested interest.
Recently, there were scandals that there were dishonesty in fixing the rates in London, and that some banks were posting fictitious rates and benefiting from their acts by trading on these false rates. Apparently, there were similar abuses in other countries.
The Association of Banks in Singapore has recommended that the Monetary Authority of Singapore should be involved in the fixing of the rates.
I support this move, as there a neutral and responsible body should take the responsibility in overseeing this activity. While it may be challenging, the responsibility cannot be delegating to interested parties, such as the banks.
I hope that the recent scandals in several fields around the world underlines the need for regulators to play a more active role, instead of leaving matters to the market or to the participants with vested interest.
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